Cotton's Week: January 10, 2003

Cotton's Week: January 10, 2003

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NCC Chairman Kenneth Hood told those attending the ’03 Beltwide Cotton Conferences that the NCC’s primary challenge since passage of the new farm bill and one that persists has been maintaining that policy in the face of a constant flow of misinformation and negative publicity.

"Most of the Congressional criticism is coming from members who want to see more restrictive payment limits, and they are looking for a legislative vehicle to amend those provisions," the Gunnison, MS, producer said. "The Council has been working to repel further restrictions on program benefits since early last year and continues those efforts as Congress renews the appropriations process this month."

Hood’s remarks came at the NCC-coordinated forum attended by 3,100-plus cotton industry members, researchers, Extension personnel, county agents, consultants, agribusiness representatives and others with a vested interest in the US cotton industry.

The NCC, he said, also has joined an array of general farm, commodity, bank and manufacturer organizations in urging Congressional support for emergency disaster assistance for crop and livestock producers who suffered losses during the ’01 and ’02 production years.

"Our goal has been to persuade Congress to provide this assistance on a truly emergency basis, just as other disaster assistance is provided for losses due to severe storms, without requiring (farm program) offsets."

In other key reports:

NCC President and Chief Executive Officer Gaylon Booker said with trade liberalization inevitable, the US cotton industry can no longer afford to allow US trade negotiators to be generous with US market access without getting something meaningful in return.

He said the US textile industry has not been a high priority for those negotiators in the past as evidenced by the US tariff rate average of 8.9% compared to effective rates for textile and apparel products entering Argentina of 40-50%; Brazil, 40-70%; China, 20-36%; India, 50-70% and Pakistan, 40-60%.

"We have the same kind of unlevel playing field in agricultural product tariffs," Booker said. "The US faces a 62% average allowable tariff rate when it ships agricultural products abroad, with the rate in many countries exceeding 100%. Our competitors abroad can ship their products into the US and pay a modest 12% tariff."

Booker also noted that as the USTR presses the Administration’s trade agenda, it will be crucial to make policymakers understand that "global farm policy and international trade policy must be compatible and fair. For the cotton industry, good farm policy and good trade policy must take into account the interests and needs of the US textile industry."

USDA Deputy Secretary James Moseley said homeland security tops the list of challenges threatening America’s farmers, but other important issues USDA is grappling with are implementation of the new farm bill, biotechnology and US farmer competitiveness.

"Agriculture is the key to this nation’s well-being," Moseley said. "If someone cripples US agriculture, the result will be devastating. We have to assure the bio-security of the farm, the security of processing facilities and of every piece of our production system."

Bruce Knight, chief of the Natural Resources Conservation Service (NRCS), told attendees that farmers are entering the "golden age of conservation," where the focus is on goals not programs for working lands.

He said the new conservation programs give farmers a great deal of flexibility to maintain industry profit while meeting and expanding conservation guidelines at the local level. Program funding also was increased for farmers who are already employing conservation practices.

Knight said rules for the Environmental Quality Incentive Program will be out later in January, and he said organizations like the NCC can help spread the word about the opportunities under this and other programs.

Memphis cotton merchant William B. Dunavant, Jr., said his company’s analysts are projecting 14 million acres of US cotton in ’03, producing a crop of 17.5 million bales. He said domestic consumption will decline to 7.35 million bales, but exports will remain firm at 10.9 million, resulting in a drawdown of US carryover to 5.7 million. He believes world production will expand by about 8%, going from 87.5 million bales to 94.5 million, while consumption won’t expand nearly so dramatically, going from 95.5 million bales to 97 million, only a 1.6% increase. If those projections pan out, world carryover will drop again to 36.3 million bales, compared to 38.8 million in ’02.

USDA’s January US cotton projections feature lower production and ending stocks, with production estimated about 200,000 bales lower than last month at 17.1 million bales and carryover at 6.3 million bales, down 200,000 bales from last month. Reduced production is because of lower estimates for the Southeast and Arizona.

Projections for domestic mill use and exports are unchanged at 7.5 and 10.8 million bales, respectively.

A significant adjustment of about 700,000 bales in world beginning stocks lowered estimated world carryover to 38 million bales, a stocks-to-use ratio of 39.3%.

NCC was among a coalition of more than 40 commodity, livestock, specialty crop and agribusiness representatives that visited Washington to urge Congress and the Administration to approve disaster assistance for ’01 and ’02 crop losses due to weather.

Ronnie Fleming, a North Carolina producer and president of Southern Cotton Growers, and Rickey Bearden, a Texas producer and vice president of Plains Cotton Growers, participated in meetings with key members of Congress and the Administration that included House and Senate leaders, Ag Secretary Veneman and White House Ag Specialist Chuck Connor. The coalition is urging Congress to approve legislation that would cover weather-related yield and quality losses for both the ’01 and ’02 crops and from natural disasters, including drought, flood, insect infestation, frost and freeze. The coalition also is requesting that funding be made available on an "emergency" basis and not be generated through savings achieved by cutting farm programs authorized by the new farm bill.

Burns, a freshman member and newly appointed to serve on the House Agriculture Committee, introduced the legislation as his first official floor action. The measure would authorize the Secretary of Agriculture to cover weather-related yield and quality losses using the same thresholds and payment rates as used for the ’02 crop loss assistance.

Rep. Moran (R-KS) also has introduced legislation, and several additional measures are expected in the near future.

Rep. Goodlatte (R-VA) was elected chairman of the House Ag Committee, replacing Rep. Combest (R-TX), who has announced his intention to resign from Congress effective May 31. Goodlatte served previously as chairman of the Subcommittee on Department Operations, Oversight, Nutrition and Forestry.

The new chairman was first elected to the House in ’92 and is serving his 6th term.

Freshmen Republican members appointed to serve on the Ag Committee for the 108th Congress are Bonner (AL), Burns (GA), Chocola (IN), Janklow (SD), King (IA), Musgrave (CO), Rogers (AL) and Nunes (CA). Democrats will complete their committee appointments the week of Jan. 13.

Cotton Belt Representatives Berry (D-AR) and Bishop (D-GA), both longstanding members of the House Agriculture Committee, were selected to fill vacancies on the Appropriations Committee. As members, they will participate in the development of annual legislation that provides funding for all government operations, including USDA. Subcommittee assignments will be made at a later date.

Study Confirms Biotech’s Role in Move to Conservation Tillage in Cotton

The availability of herbicide-tolerant cotton has allowed and encouraged cotton growers to adopt conservation tillage practices, according to a study conducted for the NCC.

Supported by The Cotton Foundation, the study found that reduced-till and no-till cotton acres have increased to 59% of total cotton acres since herbicide-tolerant transgenic cottons became widely available in ’97. No-till acres have nearly doubled, to 29% of total cotton acres, while reduced-till acres have more than doubled, to account for 30% of cotton acres.

The introduction of herbicide-tolerant varieties, especially with Roundup Ready technology, was cited as the enabling factor by 79% of those who have moved to conservation tillage in the last 5 years. Roundup Ready cotton acres have tripled since ’97 and accounted for 77% of total cotton acres grown in ’02.

Growers in the survey, conducted by Doane Market Research, Inc., indicated, on average, that conservation tillage results in a $20.13 savings for fuel and labor when compared to conventional acres.

Net export sales for the week ending Jan. 2 were 131,600 bales (480 lbs.), down 33% from the previous week. Total sales for the ’02-03 marketing year are just short of 7.5 million bales, approximately 2.1 million bales below this same time in the ’01-02 marketing year. Total new crop (’03-04) sales are 503,100 bales (480-lb.).

Shipments for the week were 275,200 bales, bringing total exports to date to 3.5 million bales, down from 4.1 million at the comparable point in the ’01-02 marketing year.